Green Plains Grapples With Buy Point

Green Plains (NASDAQ:GPRE) is trying to decisively clear a 32.70 buy point from a cup-without-handle base .

It passed the entry level Monday and Tuesday, but volume and price action were weak. A breakout is a time when you want to see solid demand for shares. The breakout may just need some patience: Sometimes, big volume can kick in later.

Another risk is that the base is a late-stage pattern.

The stock had rallied for the past six weeks. Although all of the weekly gains came in below-average trade, Green Plains' Accumulation/Distribution Rating and its up-down volume ratio suggest the stock is under accumulation.

Mutual fund ownership ramped up to 289 funds at the end of the first quarter from 155 funds five quarters before that.

Omaha Neb.-based Green Plains produces ethanol, which has a wide range of uses, including automotive fuel and the manufacturing of personal-care products.

The company is the fourth biggest ethanol producer in North America. It has the capacity to produce about a billion gallons of ethanol annually. It bought three ethanol plants last year, which boosted production by 38%.

Green Plains also makes corn oil and operates grain elevators.

Due to Midwest droughts, Green Plains had a rough 2012. That's when earnings tumbled 60% and sales fell 2%. Profit jumped back 215% last year, but revenue dropped 13%.

Lower grain sales and a drop in ethanol volumes hurt the top line. Weaker sales in agronomy, which deals in the science of oil management and the production of crops, also hurt the company's performance.

In April, Green Plains reported a first-quarter profit of $1.04 a share, up from just 8 cents a share in the year-ago period. Sales, however, slipped 4% to $733.9 million. Ethanol production jumped 35%, but that was offset by a 21% drop in the average price per gallon.

Green Plains (NASDAQ:GPRE) is trying to decisively clear a 32.70 buy point from a cup-without-handle base .

It passed the entry level Monday and Tuesday, but volume and price action were weak. A breakout is a time when you want to see solid demand for shares. The breakout may just need some patience: Sometimes, big volume can kick in later.

Another risk is that the base is a late-stage pattern.

The stock had rallied for the past six weeks. Although all of the weekly gains came in below-average trade, Green Plains' Accumulation/Distribution Rating and its up-down volume ratio suggest the stock is under accumulation.

Mutual fund ownership ramped up to 289 funds at the end of the first quarter from 155 funds five quarters before that.

Omaha Neb.-based Green Plains produces ethanol, which has a wide range of uses, including automotive fuel and the manufacturing of personal-care products.

The company is the fourth biggest ethanol producer in North America. It has the capacity to produce about a billion gallons of ethanol annually. It bought three ethanol plants last year, which boosted production by 38%.

Green Plains also makes corn oil and operates grain elevators.

Due to Midwest droughts, Green Plains had a rough 2012. That's when earnings tumbled 60% and sales fell 2%. Profit jumped back 215% last year, but revenue dropped 13%.

Lower grain sales and a drop in ethanol volumes hurt the top line. Weaker sales in agronomy, which deals in the science of oil management and the production of crops, also hurt the company's performance.

In April, Green Plains reported a first-quarter profit of $1.04 a share, up from just 8 cents a share in the year-ago period. Sales, however, slipped 4% to $733.9 million. Ethanol production jumped 35%, but that was offset by a 21% drop in the average price per gallon.

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